Calif. Educators Gear Up for Bruising Budget Battle

California educators are bracing for an intense fight as lawmakers
turn their attention to the state's projected budget shortfall, which
forecasters say has doubled to more than $11 billion in the past few
months.

School advocates, who last year endured a similar budget battle,
rallied soon after last month's revised budget projections and have
issued dire warnings that even a $1-billion cut in this year's budget
could leave many school districts reeling.

"They have already used their reserves to avoid cuts, so they don't
have that option anymore,'' said Superintendent of Public Instruction
Bill Honig. "What we have now is the choice between bankruptcy or
making cuts that will kill the program. It's that serious.''

With California's economy still stuck in the doldrums, the recent
forecast showed that the anticipated deficit for the 18-month period
from January 1992 through June 1993 had risen far above the $6-billion
shortfall anticipated by Gov. Pete Wilson and factored into his budget
proposal earlier this year.

The Republican Governor has said he will not revise his
recommendation, however, instead saying he would prefer to hammer out
alternatives with leaders of the Democrat-majority legislature.

A Bleak Set of Options

Meanwhile, officials from the state finance department have offered
a bleak set of fiscal options to lawmakers that revolve around
recalculated school-aid figures.

The finance officials have advanced a plan that would include a
$1-billion cut in fiscal 1992 school spending and a similar cut in
fiscal 1993. The figures would come on top of Mr. Wilson's original
plan to cut school spending by 1.5 percent next year.

With the $2-billion education cut, finance officials explained,
state leaders would still have to slash about 15 percent from all other
state accounts. With no further education cut, other state agencies
could expect budget declines exceeding 30 percent.

Observers said legislators have not shown much enthusiasm for the
finance department's plan, but added that the atmosphere for the budget
talks will not become apparent until after this week's primary
elections.

While leading lawmakers have given signs that they are willing to
consider a host of options, many in the state capital said it is too
early to tell what direction the talks will take.

And despite the calls from the finance department, Mr. Wilson has
not indicated what options he will embrace, officials said.

"The Governor is very artfully separating himself from his own
department's option,'' said Kevin R. Gordon, the director of government
relations for the California School Boards Association. "There are
going to be some cuts, but it is really hard to say how much.''

School officials argue that there is almost no room for cuts in this
year's budget. They also contend that there can be a cut of only about
$500 million in next year's education spending before the state will be
in violation of Proposition 98, the constitutional amendment that
guarantees 40 percent of general funds for K-14 education.

Losing Nine Years' Gains

State officials have noted, however, that even without regard for
Proposition 98, California schools are heading for severe financial
trouble.

In testimony before a state commission in Los Angeles last month,
Controller Gray Davis said many districts are nearing insolvency. He
noted that 592 districts ran deficits for part of last year, 217 have
done so for more than one year, and 108 districts have dipped below
accepted budget-reserve levels.

"It is clear from this data that a significant number of
California's public schools are not prepared to absorb another severe
financial shock in 1992-93,'' Mr. Davis said, adding that the Los
Angeles Unified School District may head the list of victims.

Mr. Honig added that educators are trying to use the election year
to turn up the pressure on lawmakers to seek alternatives to school
cuts. Legislators need to take a long look at their budget options, he
said, including given school districts more flexibility to raise funds
locally.

"We could lose in one year what has taken us nine years to build in
this state,'' Mr. Honig said. "We hope that everything goes on the
table, because this is about the future of California.''

Vol. 11, Issue 37, Page 19

Published in Print: June 3, 1992, as Calif. Educators Gear Up for Bruising Budget Battle

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